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Central bank meetings

Bank of Korea (April 10th): The Bank of Korea is expected to keep its base rate unchanged at 2.50% this week. Recent data suggests that economic growth has remained resilient despite Middle East tensions, supported by strong demand for memory chips. Exports recorded robust growth of 48% yoy in March, while manufacturing PMI remained solid at 52.6.

Inflation has picked up modestly, driven by rising global energy prices and a weakening Korean won. Headline CPI rose to 2.2% yoy in March, up from 2.0% in Jan–Feb, but still below the BOK’s policy rate of 2.50%.

In response to ongoing energy price shocks, fiscal policy may offer a more effective means of easing inflationary pressures while supporting growth. The government has proposed a supplementary budget worth KRW 26.2tn, which has been submitted to the National Assembly. The BOK is unlikely to rush into rate hikes, given the trade-off between containing inflation and sustaining growth.

Reserve Bank of India (April 8th): The macro landscape has changed considerably since the February 2026 rate review. While tariff risks were reduced by the US Supreme Court ruling, external risks have increased significantly, particularly due to rising global oil prices and geopolitical tensions. Financial markets have also shown stress, with rising bond yields and currency depreciation, despite earlier liquidity support from the RBI. Reflecting these risks, implied rates have risen sharply as investors factor in the risk of a tighter policy stance.

Domestic inflation is coming off a low starting point base, with FY26 average at 2.0-2.2%, suggesting there is more cushion to absorb the risk of fuel price hikes in FY27, without posing material risk to the upper bound of the target range (at 6%). With this shock being primarily supply-driven, monetary policy might be a blunt and potentially ineffective tool in the short term to arrest inflationary expectations. In the context of this stagflationary shock and exogenous nature of the event risk, we expect the RBI to keep rates on hold in April, while addressing specific pockets of strain. We expect a change in the policy stance towards tightness if there are material spillover risks on core inflation and potential second round effects.

Forthcoming data releases

China: Consumer prices are expected to rise from 1.3% yoy in February to 1.5% in March, driven by higher oil prices amid the Middle East conflict. The South China Composite Index, tracking commodity price, jumped 7.3% mom in March, supported by price increases in upstream and midstream sectors, particularly in energy, metals, and industrial products. Given the strong correlation (0.84) between oil prices and PPI, the raw material purchasing price sub-index of PMI also surged from 54.8 in February to 63.9 in March, marking its highest level since 2022. However, downstream consumer prices are likely to remain relatively contained due to the pricing band mechanism, which helps moderate retail price fluctuations in key commodity and energy markets.

Taiwan: March trade and inflation data are due this week. Export growth is expected to sustain strong double-digit expansion of around 30% yoy, supported by still-robust AI-related demand, which has remained resilient amid Middle East tensions. The March manufacturing PMI also held comfortably above the neutral 50 mark, including strength in the new orders subindex.

On the inflation front, CPI is likely to rise above 1.5% yoy, driven by higher transportation costs amid the global oil price surge, although these increases have been partly absorbed by the Chinese Petroleum Corporation. Meanwhile, the raw material price subindex within the manufacturing PMI rose sharply in March, pointing to mounting cost pressures among upstream producers. Overall, the growth–inflation dynamics suggest a potential shift toward monetary policy tightening later this year.

Malaysia: Malaysia’s industrial production (IP) likely continued to register solid growth in February 2026, albeit at a slower pace of 5.0% yoy, compared with a stronger expansion of 5.9% yoy in January. The increase in IP was likely supported by resilient export-oriented manufacturing, driven by electrical & electronics shipments, which rose by 28.5% yoy in February, compared with 39.5% in January, while mining activity also likely provided support.

Thailand: We expect Thailand’s headline inflation to jump to 0.6% yoy in March 2026, from -0.9% yoy in February, thereby ending 11 consecutive months of falling consumer prices. The acceleration in price pressures was primarily driven by a sharp rise in global energy prices amid the escalation of the Iran-centred Middle East conflict, which in turn pushed up domestic fuel prices in Thailand. Notably, Thai diesel prices rose significantly by more than 30% in March after the government removed the price cap on March 25. Heightened uncertainty surrounding the Middle East conflict poses upside risks to Thailand’s inflation outlook and has likely closed the room for further monetary easing by the Bank of Thailand to support the lagging economy and weak credit conditions.

Vietnam: We expect Vietnam to register resilient economic growth of 7.8% yoy in 1Q26, albeit lower than the exceptional expansion of above 8% yoy recorded over the past three quarters, with growth typically moderating in the first quarter of the year. Real GDP growth continued to be underpinned by resilient export-oriented manufacturing activity, supported by strength in electronics driven by spillovers from global artificial intelligence-related tailwinds. However, a continued rise in headline inflation to 3.7% yoy in March - driven by higher transport prices following a spike in global energy prices amid the Middle East conflict - could have dampened consumer-related activity, despite the government’s proactive emergency measures to mitigate the energy price shock, including tax cuts, utilisation of the stabilisation fund, and energy conservation measures.

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